In the Institute’s final WorldViews seminar of its seventh season, Jeff Dayton-Johnson gave a virtual talk titled “Freedom and the U.S. Economy: From Trump to Biden,” in which he argued that increasing rising income inequality due to the pandemic has made leading economic indicators poor measures of our national well-being.
Dayton-Johnson, vice president for academic affairs and dean of the Institute, opened by saying he’d been thinking of the differences between the Trump and Biden administrations in terms of economic policymaking and outcomes. “I was struck by the degree to which the economic indicators we commonly use reflect only imperfectly, at best, the variables we care about,” he said. “And what we really care about is freedom. That is to say, economic performance is good economic performance only insofar as it expands the freedoms available to members of the society.”
While economists define freedom in terms such as having one’s basic physical needs met or having the ability to buy and sell goods and services, Dayton-Johnson had his own take. He said, “It’s true that I’m an economist, but I’m also a big jazz fan. And when I think of freedom, I think about freedom as it was expressed by Ornette Coleman,” a pioneer of free jazz, an experimental approach to improvisation that developed in the 1950s and ’60s.
Dayton-Johnson said Coleman and his bandmates had two kinds of freedom: first, the freedom to choose their life paths as musicians; and second, the musical freedom to choose which notes to play—while still recognizing your role in the ensemble. “You are free to decide, and you’re responsible and accountable to others for the choices that you make,” Dayton-Johnson said, likening that concept to the words of Dr. Martin Luther King Jr. in his “Letter from Birmingham Jail”: “We are caught in an inescapable network of mutuality, tied in a single garment of destiny.”
Economic performance is good economic performance only insofar as it expands the freedoms available to members of the society.
Dayton-Johnson then turned to three major leading economic indicators that President Trump often hailed as evidence of the country’s health: economic growth, the unemployment rate, and the stock market. Dayton-Johnson questioned whether these had much connection to most Americans’ prosperity (or the freedom that allows), especially during the pandemic.
He said economic growth of 5 percent, for example, in terms of national income or gross domestic product, is a useful measure of freedom only if it means that “everybody has more resources to pursue their life project, whether that project is material or intellectual or political or physical.… The problem is that not everybody’s income goes up by 5 percent.”
Turning to unemployment, Dayton-Johnson agreed that for most people, employment is the best way to get income, and “income is a step toward being able to enlarge your freedoms.” However, he said, “it’s complicated to say that having a job is directly contributing to your freedom. For many people, that won’t be the case.” The COVID-19 crisis, in particular, caused many people to lose their jobs and the freedoms associated with their income. But many of those who kept their jobs—those deemed “essential workers”—sacrificed freedoms as well. “There are many people who do not have the freedom to find work that is also free of physical danger,” he said. “We’ve seen so many essential workers on the front lines exposed to COVID-19, many of whom have succumbed to that contagion.”
Last, he questioned the current relevance of the stock market to most people, given that most of the gains since the start of the pandemic have benefited only a small segment of American households. “Once again, the issue of inequality rears its head and it makes it difficult for us to interpret the stock market indices as a measure of well-being or, particularly, as a measure of freedom.”
So where can we look for more relevant indicators? Dayton-Johnson recommended the United Nations’ annual Human Development Report. It includes data from many countries on such things as press freedoms, political participation, life expectancy, schooling, and more. “These are more direct measures of the opportunities that people have to realize their potential.”
As a positive policy example, he held up the Biden administration’s American Rescue Plan, which expands coverage of the child tax credit to more poor households. “Providing for the security of children’s upbringing when they’re small is one of the most important ingredients you can add to their capacity to deliberate as adults about what they want to do with their lives,” he said.
Coming back to jazz, Dayton-Johnson said, “What we should really care about is Ornette Coleman—not his records, but the Ornette Coleman concept of freedom, the pursuit of a life project, the freedom to make decisions and have responsibility to others in this ‘network of mutuality’ that Dr. King talked about.”
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